SEO Gets Even Dicier
A leak of Google’s search-engine optimization secrets and the rise of artificial intelligence give businesses even more reason to be skeptical about their SEO strategies.
Good Morning!
Here are today’s highlights:
Faced with a backlash, restaurants are giving up on QR codes.
Are your employees taking vacations without telling you? Yes, it’s a thing.
The housing market is showing signs of life.
Want to own a 100-year-old pizzeria on Coney Island?
MANAGEMENT
In this week’s video, Lou Mosca says too few business owners take the time to expand their horizons: “Business owners often get caught up in their daily responsibilities and miss out on the broader world. I never really found solace in hitting golf balls; I know many owners do. Instead of hitting 18 holes or the range, you should focus on reading to gain knowledge. It doesn't matter what you read—books or magazines—the act of reading can, I believe, help you become smarter. Whether you read about business or fiction or listen to business podcasts, you learn to become a better leader.” CONNECT WITH LOU
MARKETING
A massive trove of documents suggests that Google has not always been honest about what drives SEO: “Google is the front door to the internet through which so many businesses are dependent, yet its constantly evolving algorithms have remained closely guarded behind lock and key. Until this week, when the black box was finally opened. A trove of 2,500 documents containing highly coveted secrets about how Google ranks its search results began circulating among a handful of search-engine-optimization experts, who shared them more widely on Monday. The company has confirmed the material is real.”
“Erfan Azimi, the CEO of the SEO agency EA Eagle Digital, who said he first stumbled on the documents online, released a dramatic 13-minute YouTube video. For Azim and many others in the SEO community, some details in the leak appear to confirm their suspicions: Google may not have been entirely honest about the most important signals that determine which sites appear at the coveted top half of the search-engine results page.”
“The leak has stoked more distrust in Google just as it prepares to rewrite the rulebook. With Google promising to ‘do the Googling for you’ with its summaries powered by generative artificial intelligence, many website owners are preparing for a future in which the company hoovers up their content and delivers no visitors in return.” READ MORE
SMALLBIZ TECH
Restaurants are ditching QR codes: “Not that long ago, QR code menus were the go-to fix for restaurants looking to speed up service without hiring more servers. Then the diners staged a revolt. Complaints over QR codes include customers who say they need to squint to figure out their order. Others are worried about privacy. And some people simply have trouble with the technology itself or feel it kills the restaurant’s upscale vibe.”
“At Farm Bar, a Chicago restaurant with two locations, only one is discontinuing some QR code offerings. Customers at the other location, in the city’s Lakeview neighborhood, skew younger and enjoy the more efficient service they get by using a QR code, says Joshua Hampton, a server who works at both locations. The biggest hurdle can be telling customers to take out their phones.”
“Menus accessed only by smartphone make swapping out menu items or adjusting prices easier, says Rich Fox, operating owner of Yes Parade Restaurant Group in Seattle. But the codes have frustrated customers, the owners and employees at the company’s 12 restaurants, he says. Using QR code menus at the company’s chef-driven restaurants lowered check averages by 10 percent because diners often didn’t scroll through all of the offerings. That, in turn, lowered tips for servers.”
“Flour + Water, an Italy-meets-California restaurant in San Francisco, still adds a QR code to the printed wine menu. Servers are taught to walk diners though the wine list. Those who want even more information can read some of beverage director Sam Bogue’s tasting notes and view a map of each wine region as well as details about individual producers. Roughly 100 people click on the offering each month.” READ MORE
HUMAN RESOURCES
The latest trend among disengaged employees? “Quiet vacationing:” “In a recent survey by Harris Poll, nearly 40 percent of Millennial workers said they take time off without formally communicating it to their manager. The respondents admitted to partaking in office workarounds, such as periodically moving their computer mouse to appear active, as well as scheduling messages to be sent outside of normal business hours to maintain the impression that they are going above and beyond for their employer by working overtime.”
“Seventy-six percent of American workers expressed that they wished their employer placed a greater emphasis on the value of taking time off. Nearly 80 percent of Americans do not use their maximum amount of PTO, citing the ‘pressure to always be available’ as the top reason.”
“Millennials and Gen-Z report fearing their managers’ reactions, as well as the implications the time off may have on their future career prospects, such as raises and promotions. Forty-nine percent of American workers said they get nervous when requesting PTO from their employer, which prompts them to lie to their manager.” READ MORE
PRIVATE EQUITY
Dental practices? Check. Vet practices? Check. Next? Bowling alleys: “Fueled by millions from private equity groups like Apollo Global Management and Atairos, Bowlero has grown rapidly. Formed in 2014, it now has more than 350 centers, including the one we’re in tonight. As the company has expanded, it has amassed massive debts, all while successfully enriching its founder and CEO. It’s also become the target of a federal investigation into alleged ageist and racist hiring practices, with claims emerging of ‘beauty contest’ job interviews and threats of corporate espionage and retaliation. For the most part, Bowlero doesn’t build its own centers. Instead, it purchases existing ones and makes them over in the Bowlero style: dim lights, loud music, expensive cocktails. At Bowleros, bowling isn’t bowling. It’s ‘upscale entertainment.’”
“In its initial acquisition wave, Bowlero bought up prominent centers in large population areas from New York to Los Angeles. As it continues to expand, it has promised to hoover up centers everywhere else in the country. There are roughly 3,500 independent bowling centers left in America. For Bowlero, that’s 3,500 potential acquisition targets. ‘This industry,’ Bowlero executive Brett Parker has said, ‘is fragmented and ripe for roll-ups.’”
“One exception was Robin Goldberg, the owner-operator of Dream Lanes in Madison, Wisconsin. Bowlero has acquired several centers throughout Wisconsin, but they’ve yet to reach Madison. Goldberg knows Dream Lanes may yet become a target for Bowlero, but he hopes to never sell to the company. Doing so, he said, would mean that ‘my brand, that I spent a lifetime working on, would get flushed down the toilet.’” READ MORE
POLICY
The SBA is lifting caps on 504 loans used for energy-efficiency projects: “Small businesses looking to make their buildings more energy efficient or to transform new buildings are getting a leg up from the Small Business Administration. Business owners previously had to contend with a $16.5 million cap on so-called ‘energy public policy’ projects under its 504 loan program. But the SBA, in an April 30 procedural notice, said the cap would no longer apply for these energy projects, including ones that would reduce existing energy consumption by at least 10 percent or generate more than 15 percent of energy used at the facility with renewable energy. Projects that incorporate designs that reduce greenhouse gasses or minimize environmental impacts are also eligible.”
“‘The updates to the SBA 504 Green Energy Program paves the way for small businesses to embrace green practices while accessing more financial support,’ said Kurt Chambliss, executive vice president at Oakland, California-based SBA 504 lender TMC Financing. ‘There is now no limit to the number of $5.5 million debentures a business can have, as long as they implement SBA-approved energy efficiencies.’” READ MORE
The Biden administration is targeting family farms with billions in new aid: “[Agriculture secretary Tom] Vilsack worries that the loss of small farmers has weakened rural economies, and he wants to stop the bleeding. Unlike his last turn in the same job, under former President Barack Obama, this time his department is able to spend billions of dollars in subsidies and incentives passed under three major laws since 2021 — including the biggest investment in conservation programs in U.S. history. The plan in a nutshell: Multiply and improve revenue streams to bolster farm balance sheets. Rather than just selling crops and livestock, farms of the future could also sell carbon credits, waste products and renewable energy.”
“The laws have collectively provided about $60 billion to the Agriculture Department, which has parceled it out across a variety of priorities, from relieving farmers’ debt to paying them to reduce their carbon emissions.”
“The biggest chunk — about $19.5 billion — has breathed new life into subsidies to encourage conservation practices that improve the land, like cutting back on plowing and planting cover crops to sequester carbon in the soil.”
“The new funding has added 16,000 recipients over the past two years. Preliminary data shows the expansion is allowing smaller farms to take part. Some of that money — in combination with another Agriculture Department pot for renewable energy — will be used to buy a $2.9 million methane digester at Savage View Farm, a dairy in Grand Isle, Vt., with 700 milking cows.”
“Fed with copious amounts of manure, the machinery will generate electricity that is sold back to the local utility and dehydrated solids that can be used for cow bedding. A tax credit in the Inflation Reduction Act will decrease the farm’s tax liability, and in nonfinancial benefits, the facility will reduce the odors generated by spreading raw manure on fields.” READ MORE
THE ECONOMY
The housing market is showing signs of life: “First, the steep acceleration in home-price growth looks to be over, Schwab said. That's in reference to the marked increases seen between 2022 and 2023, as pandemic buying fever turbocharged pricing. Just four years into this decade, prices have rocketed 47 percent higher. While growth has normalized, prices still remain elevated, with median prices of existing and new homes both near all-time highs.”
“Second, sales are steadily picking up, though meaningful bounce-back hasn't happened yet, Schwab said. In the past few years, home sales plummeted, falling by a maximum drop of 41 percent. That's been outdone by new home sales, which fell almost 50 percent. Though still below their cycle peaks, both are up 9 percent and 22 percent from their recent troughs.”
“Third, new inventory supply has soared, as homebuilders hurried to respond to unmet demand. Even before the pandemic, a shortage of housing has been a point of pressure for consumers, only made worse by homeowners that have been kept from moving due to today's high mortgage rates.” READ MORE
BUSINESS FOR SALE
After 100 years, a legendary Coney Island pizzeria hits the market: “Since it was founded in 1924 by a baker from Naples, Italy, named Antonio Pero, very little has changed at Totonno’s Pizzeria Napolitana. The restaurant has operated in the same one-story building in Coney Island, burned coal in the same brick oven and followed the same recipe to make pizza that is widely held to be among New York City’s finest. In all that time, Totonno’s has been continuously owned and operated by one family. Now it is on the brink of what could be the most consequential change in its history: The family is looking for an investor or buyer to take over. On Wednesday night, a note was added to Totonno’s website asking interested parties to send an email.”
“Explaining the decision, Louise Ciminieri, who owns the pizzeria with her sister, Antoinette Balzano, and their brother, Frank Balzano, said, ‘We’re coming up in age and we don’t have the manpower to continue.’”
“The family is adamant that the ideal buyer will be excited about carrying on their century-old way of making pizza. The business methods are almost as old. Totonno’s accepted only cash until two years ago, when after a long pandemic pause it began taking credit cards.”
“Prospective buyers ‘can’t go by numbers,’ said Ms. Ciminieri, known to everyone as Cookie. ‘They have to understand the potential, and they have to understand my blood, sweat and tears in that place for 45 years.’” READ MORE
THE 21 HATS PODCAST
How to Sell a Business That Won’t Sell: We’re calling it a We-SOP. The term, coined by Jay Goltz, refers to a business transition that is something of a do-it-yourself ESOP, or employee stock ownership plan, but without the expense and complication and debt of a full ESOP. It’s a transition that lets owners get money out of what has been their life’s work. It’s a transition that lets loyal employees keep their jobs and preserve the company’s culture. And it’s a promising solution for the Silver Tsunami of retiring Baby Boomers because it can provide a sales path even for owners who have never managed to extricate themselves from their day-to-day operations.
And in this week’s episode, we take you through an example of how it can work. Jay introduces us to Jill and Paul Choma, co-owners of a business, Gilded Moon Framing, that Jay recently guided through the We-SOP process. As you’ll hear, all three believe that what has worked—at least so far—for Jill and Paul could also work for many other business owners.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren